Nuclear’s 2016 Uptick Was a ‘Dead Cat Bounce’

A minor uptick in new generation from a “stagnant” nuclear industry was nothing more than a “dead cat bounce,” writes Jim Green, national nuclear campaigner with Friends of the Earth Australia, in a year when hopes faded for new designs of supposedly safer, cheaper reactors, new renewable generation far outpaced new nuclear, and uranium suffered the worst 2016 of any commodity.

Green singles out Japan’s Toshiba for examination. In 2006, the manufacturer paid US$5.4 billion to acquire Westinghouse Electric Company for its nuclear power business. At the time, Westinghouse had installed 98 nuclear power plants and operated 34 plants itself in more than a dozen countries. And as recently as last year, Toshiba still “hoped to win 50 contracts to build new nuclear plants in India and China over the next decade, [as well as] reactor construction projects planned in the UK, Turkey, and elsewhere.”

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Now, Green writes, Toshiba is facing a nearly US$7 billion write-down for “delays and cost overruns on nuclear construction projects in the U.S., [and is] ‘re-examining its relationship’ with its struggling US subsidiary.”

Green quotes pro-nuclear commentator Dan Yurman’s concession that “the looming, massive write-down has ‘doomed’ the company’s U.S. nuclear business, and ‘also apparently ends the so-called nuclear renaissance in the U.S. for full-size reactors.’”

Between 2007 and 2010, Green notes, industry forecasts anticipated “more than two dozen applications for new reactors” in the United States. Nearing a decade later, “only a few licences have been completed, and they do not have near-term plans to build.”

“Other nuclear utilities around the world are also in deep trouble,” Green says, citing the 2016 World Nuclear Industry Status Report. The annual industry overview observed that “many traditional nuclear utilities are struggling with a dramatic plunge in wholesale power prices, a shrinking client base, declining power consumption, high debt loads, increasing production costs at aging facilities, and stiff competition, especially from renewables.” At least 153 gigawatts of renewable generation were installed in each of 2015 and 2016, he notes—compared to just 9.2 GW of nuclear brought into service last year.

The blues carry through to the suppliers of nuclear fuel. “No major commodity had a worse 2016 than uranium,” Bloomberg reported last month. “In fact, the element used to make nuclear fuel has had a pretty dismal decade.”

After ramping up in expectation of that long-awaited nuclear renaissance, uranium miners now face a market glut of yellowcake. “The price has fallen for seven of the past nine years,” the outlet reports. Last year it plunged another 41%, to a 12-year low of US$18 a pound in November, prompting Canadian miner NexGen Energy’s Leigh Curyer to lament, “I don’t think there’s a mine profitable at current spot prices.”

Surveying the industry’s setbacks, delays, and retrenchments in country after country around the world, Green finds that “there were no victories for the nuclear industry last year, pyrrhic or otherwise…just misery. The industry is in a world of pain.”